Adjusting Entries: Please tell me how this would be recorded on a General Journal. The following categories are in this order Date, Description, Post Ref, Debit, Credit.a) Depreciation expense for the month on the building is $2,000b) A count of the Supplies account indicates that supplies of $450 have been usedc) Two months have passed since insurance for the year was paid. The amount of the check was $1,200. The entry at time of payment debited the Prepaid Insurance accountd) Employees have earned $400 since the last pay daye) Advertising in the local paper was paid this month in the amount of $500. THe amount was debited to Prepaid Advertising and the advertisement is to run next monthf) Joe Moreland paid us $500 in advance for work to be done on his residence. The entry to record the collection of this cash included a credit to Labor Revenue. The work is halfway done.

Question
Asked Feb 1, 2019

Adjusting Entries: Please tell me how this would be recorded on a General Journal. The following categories are in this order Date, Description, Post Ref, Debit, Credit.

a) Depreciation expense for the month on the building is $2,000
b) A count of the Supplies account indicates that supplies of $450 have been used
c) Two months have passed since insurance for the year was paid. The amount of the check was $1,200. The entry at time of payment debited the Prepaid Insurance account
d) Employees have earned $400 since the last pay day
e) Advertising in the local paper was paid this month in the amount of $500. THe amount was debited to Prepaid Advertising and the advertisement is to run next month
f) Joe Moreland paid us $500 in advance for work to be done on his residence. The entry to record the collection of this cash included a credit to Labor Revenue. The work is halfway done.

check_circleExpert Solution
Step 1

Transaction a. Depreciation charged is debited to Depreciation expenses and will increase the accumulated depreciation balance on building.

Transaction b: Supplies consumed for the amount of $ 450 will become the Supplies expenses and will reduce the supplies inventory in hand.

The Journal entry for both is as above.

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Step 2

Transaction c: Insurance paid in advance for the year which has already been included in Prepaid insurance has been expired for two months (i.e. 1200/12 = 100 per month). Therefore, expired portion will increase the insurance expenses and Prepaid insurance balance will reduce.

Transaction d: Wages incurred but not paid will increase both the expenses account and liabilities account as well.

The Journal entries for above transactions are as above.

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Step 3

Transaction e: Advertisement paid in advance for next month has already been included in Prepaid advertisement which has been rightly done. Therefore, no entry is required for this transaction.

Transaction f: Revenue received credited to...

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